5 Ways to Invest in the New Year

by Miranda Marquit · 10 comments

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Many of us couldn’t wait for the past year to be over. And now that a new year is finally underway, it’s time to figure out how to make it great.

One of the best ways to improve your life and your finances is to invest. And you aren’t limited to investing in order to further your finances either. You can invest your money, but you can also invest in yourself. Here are some of the best ways to invest in the new year:

1. Boost Your Retirement Account Contribution

One of the best ways to invest is to boost your retirement contribution. That’s money that will grow for you over time. It’s even better if you work for a company that offers an employer match. In those cases, you get free money to invest.

If you have room to increase your retirement account contribution, do so. This is true even if it’s just by a few dollars every paycheck because getting into the habit of improvement will help you be able to increase the contributions even more down the road.

I know of some people who are already putting in as much as they could in a Roth IRA this year because they want their money to grow tax-free for as long as it’s possibly allowed to grow. How about you? How long do you plan to wait and miss out on tax-free growth for life?

2. Start (or Grow) a Business

You might be surprised at how much of a return you can get when you start or grow a business.

Consider a side gig if you haven’t started one yet. You don’t need a business that allows you to quit your day job if that’s not your thing. David was just talking about writing for others, a side gig that’s closely related to what he already does for MoneyNing.com. It sounds like he’s really enjoying it, and I bet the money is great too. I strongly encourage you to consider making some extra income this year. After all, even an extra couple hundred dollars a month can add up over time.

And if you already have a business? Consider making a small investment in growing it this year. It could be hiring some outside help, or it could be tackling a project you’ve been putting off forever. Just a little bit more can help you see big returns down the road.

3. Open a Taxable Investment Account for Different Goals

My long term emergency fund is in a taxable investment account (an all-market fund). So is my travel fund to be used when we can travel freely again. Investing the money marked for emergencies and other shorter-term goals in the volatile markets isn’t for the faint of heart, but it can be a way to save for different goals for those who otherwise have a healthy nest egg already built up. If you are looking for a way to save for different goals that aren’t retirement-related, then a taxable investment account can be one way to go about it.

You certainly don’t need to open an investment account if you don’t want to risk that money. Think about the things you want to do with your money, and at least open a high-yield savings account to help you work toward those goals.

4. Invest in Yourself

Don’t forget to invest in yourself. Pay attention to things like your health, or your waistline. Especially when we are home much longer these days, your eating and exercise habits can make a big difference down the road. If you work from home, don’t always wear pajamas. Change, groom, and look good every day so you are ready to and do go out every day. You want to get sun exposure as much as you can, even if you don’t have to go out much these days. Better health saves you money in the long run, and it can help your overall quality of life today and later in life too.

Make it a point to invest in learning as well. You don’t even have to sign up for expensive classes. I’ve downloaded a language app to help me practice another language. I also spend time on the piano and reading. Find things you love and take time to do them instead of just sitting in front of the TV. You’ll be happier for it.

5. Invest in Others

Don’t forget to invest in others either. Take some time and make an effort to build those relationships with your loved ones. These relationships, and the time and effort you put into them, will repay you many-fold later on. I already enjoy my relationship with my son and I am happy to think of how it can grow even more.

You can invest in others through charity as well. Many people wait until the end of the year to donate to charities, but your resources are helpful to those in need year-round. The IRS also treats each donation as tax-deductible whether you donate in January or December. By spacing out your giving through the year, it’s also easier to manage from a cash flow perspective. Charities help the community and society as a whole, and that’s good for everyone. Plus, it can give you a good feeling to know you are helping, and that helps your mood and quality of life.

There are a lot of investments you can make in the coming year. Figure out what matters to you, and invest in it.

Editor's Note: I've begun tracking my assets through Personal Capital. I'm only using the free service so far and I no longer have to log into all the different accounts just to pull the numbers. And with a single screen showing all my assets, it's much easier to figure out when I need to rebalance or where I stand on the path to financial independence.

They developed this pretty nifty 401K Fee Analyzer that will show you whether you are paying too much in fees, as well as an Investment Checkup tool to help determine whether your asset allocation fits your risk profile. The platform literally takes a few minutes to sign up and it's free to use by following this link here. For those trying to build wealth, Personal Capital is worth a look.

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{ read the comments below or add one }

  • J D says:

    “when we can travel freely again.” You can travel freely now. Just get in your car or buy a plane ticket or a train ticket or whatever and go. I do. It’s quite easy.

    • David@MoneyNing.com says:

      Ha you caught me being lazy with my words. I should really say “when the virus is much more under control and the general public doesn’t have to be fearful of being sick just to travel.”

  • Richard D. Lum says:

    Building relationships with people you love and care about is the best investment for your future 🙂

  • Drew says:

    Great list! I’m using my taxable investments as a long-term emergency fund as well. I’m also saving for our next car purchase and house purchase in taxable investment accounts. I just can’t stomach having that much cash earning just 0.5% interest!

    • David@MoneyNing.com says:

      I hear you. Banks are swimming in liquidity though so don’t expect rates to rise much anytime soon unless something else changes.

  • 40s Guy says:

    I opened a taxable investment account when I first started working – always knowing that this would be my “freedom fund” to get me to a point where I could retire well before the traditional retirement age. I’m on track to do so by 40 in large part due to this!

    • David@MoneyNing.com says:

      Good for you to brave the road less traveled! Retiring at 40 is no easy feat and cheers in advance for your success!

  • Robert says:

    Hello Miranda,
    Some good advice that we took this second half of last year. Also utilized our 401k options to invest in our own stocks and boosted our 2021 return to 38%. We are a believer in taking our own control!

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